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Both Sides Spend Big on Prop. B

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Battle over pension and benefits reform draws high-profile backers

Updated Oct. 6 at 5:47 p.m.

Amid the increasingly rancorous fight over Proposition B, San Francisco Public Defender Jeff Adachi’s ballot initiative to require city employees to contribute more toward their pension and benefits costs, each side likes to paint the other as the one with the deeper pockets. 

Adachi and his supporters say that rapidly escalating employee pension and benefits costs have put the city on a path to bankruptcy. The union groups say that the city's pension fund is in fine shape, and that city employees have made large wage concessions in recent years. Asking city employees to pay substantially more toward their health insurance premiums is unfair, the unions argue.

The campaign-finance disclosure forms that were due Tuesday with the city’s Ethics Commission show that, as of Sept. 30, the Prop. B proponents have taken in 17 percent more than the union-backed No on B campaign. The Adachi camp has received $720,867 overall. Nearly $400,000 of that amount was collected from July 16 through Sept. 30 — the period covered by the disclosure forms. Most of the 58 contributors were individuals, and several are wealthy or otherwise prominent. 

The union group, called Stand Up for Working Families, disclosed that it took in all of its funds to date — $618,296 — in the last three months. The union group has seven union funders, and no individual donors. The firefighters’ union led the donations with $200,000; followed by Service Employees International Union Local 1021, at $190,000; the police union at $75,000; the professional and technical engineers at $65,000; the municipal executives at $32,500; and the municipal attorneys at $25,000.

The unions have hired Stearns Consulting and Burson-Marsteller to help make their case. In the most recent filing period, $372,000 in union funds were paid to Stearns (which used most of the money to buy television time and pay other vendors). Stearns describes itself on its website as providing “strategy and media services to Democratic candidates and causes.” David Noyola, the Stearns executive handling the account, was until this spring chief of staff to San Francisco Board of Supervisors President David Chiu. 

Chiu and a long list of local elected officials, including state Sen. Mark Leno, Assemblywoman Fiona Ma, and Supervisors Ross Mirkarimi, Bevan Dufty, Eric Mar and Carmen Chu, appeared with the unions at a No on B event Tuesday at the city’s Laguna Honda Hospital. 

House Speaker Nancy Pelosi, Assemblyman Tom Ammiano, state Sen. Leland Yee and Mayor Gavin Newsom have also voiced public opposition to Prop. B.

The campaign says it owes Burson-Marsteller $17,250. Nathan Ballard, Mayor Gavin Newsom’s former communications director who works for Burson-Marsteller, was hired by the No on B campaign about a month ago. 

The Yes on B campaign lists payments to Darcy Brown, a local consultant who once worked for former Mayor Willie L. Brown Jr. She was paid $37,000 in the most recent reporting period. The campaign’s largest single expenditure was $150,000 to Comcast, to air its television commercial.

Willie Brown's recent support of Prop. B, including co-hosting a fundraiser on Sept. 16 with Republican investor William Leach, has come as a surprise to the unions and some in local politics. “I was flabbergasted” when hearing the news, Dufty said at a different No on B rally last week. Dufty once worked on Brown’s staff.

In an interview Wednesday, Brown explained that his interest in pension reform dates back to his time on the board of the California Public Employees' Retirement System. "I don't have any particular special interest in Prop. B," Brown said. "I served on the CalPERS board for many years. In that time, I became fully conscious of the need for better understanding by policymakers of the pension system. I've been talking about that for the last several years."

Brown said that Jeff Adachi did not approach him to support the Prop. B effort. "He was at a conference with me in Sacramento on the general subject of pension reform," Brown said. "I indicated that what Adachi was doing in San Francisco needed to be supported. There is almost no one else in politics willing to undertake a dialogue on this issue, for fear of political reprisals."

"I assume Prop. B will pass," Brown said. "I think the public is fully aware that pension systems generally are flawed. I think the public has some problem with anybody working and not paying into the pension systems. That alone is what I think will be persuasive with the voters. The remainder of [Prop. B's] provisions, health care… I don't think voters pay that much attention to." Currently about half of the city's employees pay into the pension system, but about 95 percent will do so when a new contract takes effect in July 2011.

Other notables supporting Prop. B are former Board of Supervisors President Matt Gonzalez and venture capitalist Michael Moritz. Moritz and his wife, the novelist Harriet Heyman, donated $245,000 to help Adachi launch his campaign in the spring, but they are not listed among those who donated from July 16 through Sept. 30.

Adachi’s campaign picked up endorsements this week from the Santa Barbara-based California Center for Public Policy and SPUR, the San Francisco Planning and Urban Research Association.

The largest donors to the Yes on B camp for the most current period are:

Richard Beleson, identified as a financial analyst at Capital Group Cos. on Union Street, is listed as having donated $100,000 in total. A recent article on the website of the American Numismatic Society says that Beleson, a nominee for the board of trustees of the coin-collecting organization, is a retired research analyst who followed the biotech and pharmaceutical industries.

George Hume, of Basic American Foods, donated $50,000 on July 29. He is a member of the board of directors of the San Francisco Opera.

David Crane, a San Francisco Democrat who is also economic policy advisor to Gov. Arnold Schwarzenegger, gave $22,500 on Sept. 28, bringing his total contribution to $32,500.

Investor and philanthropist Warren Hellman, who is a major funder of The Bay Citizen and chairman of its board, donated $50,000 on Aug. 4. Hellman abruptly withdrew his support for Prop. B Wednesday. 

Richard Riordan of Los Angeles donated $25,000 in July. It was not immediately possible to learn if this is the former mayor of Los Angeles.

Republican investor Howard Leach, who co-hosted a Prop. B fundraiser with former Mayor Willie L. Brown Jr. on Sept. 16, gave $25,000 on Sept. 15.

Stephen Bechtel Jr., listed as owner of Bechtel Corp., gave $10,000 on Sept. 20.

Diane Wilsey, a philanthropist who is also a funder of The Bay Citizen and a member of its board, gave $1,000 on Sept. 29.

Board members of The Bay Citizen play no role in editorial operations.

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